Layoffs mount as economic downturn spreads

Tag : Freight Insurance

Escalating layoffs, growing unemployment and acceleratingcontraction of the capitalist economy, in the U.S. and worldwide,are taking center stage in the present global crisis.
The U.S. government is handing out trillions of dollars to thebanks, insurance companies and auto companies to make up the lossesof the millionaires and billionaires. They are letting the crisisof the capitalist system fall squarely on the backs of the workers.
Three-quarters of a million workers in the U.S. lost their jobssince September. It is expected that 200,000 a month will losetheir jobs in the next period. In September alone there were 2,269“mass layoffs,” that is, layoffs involving 50 or moreworkers at one time, involving 235,000 workers. There is no tellinghow many workers were laid off in numbers of less than 50.
New unemployment claims for the month of September were 478,000,which is a rise of 15,000 more than expected. There was an 11percent rise in the number of workers put on part-time hours, thehighest in 15 years. And there was a rise in the number of workerswho have stopped looking for work. The present officialunemployment rate of 6.1 percent is expected to increasedramatically in the next several months.
In addition, in September there were two million workers officiallyunemployed for more than 27 weeks. Several hundred thousand workersexhausted their 13-week extended unemployment benefits passed bythe Congress this summer. Many of these workers are sole familysupporters.
‘Who’s who’ of big business leading the layoffwave
Many of the big corporations with global empires sense the comingrecession and are “getting ahead of the curve” bycarrying out layoffs to cut costs and boost profits early on. Theairlines are planning 36,000 layoffs, mainly in the fourth quarter.The steel industry has shut down 17 of 29 blast furnaces. It isestimated that 300,000 jobs will be lost in the financial industryin the coming downturn. (New York Times, Oct. 26)
The auto industry has gotten rid of 100,000 workers in the lastyear and now General Motors is planning major layoffs if it canfinish its merger with Chrysler. It is estimated that the mergerwould result in 40,000 job cuts. Chrysler has already ordered thelayoff of 5,000 salaried workers by the end of the year. Thecompany has also broken its contract by ending its matchingpayments to the 401k plans.
Bank of America is also planning large layoffs once its merger withMerrill Lynch is finished.
Among the giants leading the layoff charge are Hewlett Packard with24,600 layoffs, 7.5 percent of its workforce; Goldman Sachs with3,260 layoffs, 10 percent of its workforce; National City Corp.with 4,000 layoffs, 14 percent of its workers; Dell computer with8,900 layoffs, also 10 percent of its workforce; and MerckPharmaceuticals, which has already laid off 10,400 workers in thepast three years and is planning another 7,200 layoffs, or 12percent of its workforce.
Others include PepsiCo, which closed four bottling plants and islaying off 3,300 workers, and Whirlpool, which laid off 440workers. General Electric has announced that it intends to makemajor layoffs, but won’t release the number of cuts expected.
Overproduction is to blame
It is clear that all the financial manipulation by the leadingcapitalist economic authorities has been unable to stem the tide ofthe capitalist crisis. Beginning last May, Bear Stearns collapsedand was swallowed up by JPMorgan Chase, with a $30 billion bailoutfrom the Federal Reserve Board. Next came the multibillion dollarbailout of Fannie Mae and Freddie Mac, followed by the $85 billionbailout of insurance giant AIG, the subsidized merger of WashingtonMutual with JPMorgan Chase, and the forced merger of Wachovia andWells Fargo, among others.
During this period the financial authorities were preoccupied withpreventing bank failures piecemeal. Then came the systemic bailoutplans and the $700 billion plan. But, because toxic loans werespread throughout the banking system, lending ceased and creditfroze. So the financial officials poured hundreds of billions moredollars into the banking system and declared that they wouldguarantee interbank loans in the hope of unfreezing credit. Thatwas the phase in which the credit crisis was thought to be theproblem.
Now it is clear that the crisis is flowing from capitalistoverproduction. The real estate dealers cannot sell houses. Theauto companies cannot sell autos. GE cannot sell airplane enginesto a shrinking industry. Loans will not be made to companies thatare losing sales and profits.
A surefire indicator of the economic downturn is in thetransportation industry. The pre-holiday months are the time for asignificant rise in shipping as companies build up inventory forthe season. Right now the transportation industry is in a downturnacross the board. UPS has described a “precipitousdecline” in next-day deliveries. Other trucking companieshave similar reports. Trucking carries 70 percent of the freight inthe U.S. and thousands of trucking companies have gone bankrupt inthe last year. (Wall Street Journal, Oct. 24)
The largest railroads in the country—Union Pacific,Burlington Northern Santa Fe, Norfolk Southern and CSX—haveall reported third-quarter drops in shipments. The number ofcontainers shipped through the top 10 container ports in the U.S.has dropped by 7.2 percent from January to September.
Similar reports of layoffs and economic contraction are coming infrom Asia, Europe, Latin America and the Middle East. The recessionis global and the worldwide working class is under attack.
Only solution is workers’ fight-back
This is leading to proposals in the U.S. that the trade unions,communities and municipalities band together and form a front tostop the layoffs, foreclosures and evictions and the social servicecuts that are coming down upon the people.
The demand is rising that the trillions of dollars being used tobail out the bankers be used to bail out home owners and tenants,fund health care, cancel the debt on student loans, guarantee heatand electricity to everyone this winter, open up the workplacesthat are shutting down and rehire laid-off workers.
History shows that the only answer to the onslaught of a capitalistrecession is for the workers and the oppressed to organize andfight back.
The workplaces do not have to be shut down. There are millions ofpeople who need food, clothes, automobiles, mass transportation,housing, health care and many other necessities. But the placesthat make and sell those goods and services are being shut down andcut back because there is a crisis of bosses’ profits.
The bosses have spent the last 30 years breaking unions, cuttingwages, pensions and health care benefits, raising rents and housingcosts, and generally impoverishing the vast majority of theworkers. At the same time they want the workers to buy more andmore so that the bosses can keep increasing their profits.
Capitalism has created this crisis. But the multinational workingclass, employed and unemployed, documented and undocumented, doesnot have to take it lying down. The trillions of dollars that arebeing handed over to the banks can be used to run the workplacesunder the control of the workers for the benefit of the people.
The people, through mass organizations, should have control overhow these trillions of dollars are going to be spent. After all,that money represents the wealth that was created by the workers inthe first place. In fact, the workers should not only control it,they should own it in the long run. Articles copyright 1995-2008 Workers World. Verbatim copying anddistribution of this entire article is permitted in any mediumwithout royalty provided this notice is preserved.

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